Goldman Sachs' profit run lifts Footsie into the black

The US investment giant posted first-quarter net profits of 3.5 billion dollars (2.2bn), surpassing strong Citigroup results on Monday and shattering Wall Street profit hopes.

The FTSE 100 Index closed 55.78 points higher at 5783.69 as positive corporate news from many blue-chips gave a further lift to sentiment in London.

Wall Street's Dow Jones Industrial Average added to overnight gains in early trading as markets bounced back from two difficult sessions following the fraud claims against Goldman, which emerged on Friday.

The firm is now also the subject of a formal investigation by the UK's Financial Services Authority as well as a civil lawsuit from US regulators.

US stocks edged higher as a wave of companies reported quarterly

results but some failed to beat heightened expectations.

Coca-Cola reported mixed results, Johnson & Johnson topped forecasts but drug sales slumped, and UnitedHealth Group soared past estimates. Coke stock was down 1.5 per cent to $54.50, Johnson & Johnson fell 0.2 per cent to $65.90, but UnitedHealth added 0.3 per cent to $31.15.

IBM shed 2.7 per cent to $128.70, weighing on the Dow, after it posted better-than-expected profits but disappointing gross margins on Monday.

In London, official inflation data came in worse than expected at 3.4 per cent, but this did little to dent sentiment.

March's faster than expected rise in the cost of living gave sterling a boost.

The pound rose 0.5 per cent against the euro to 1.14 and climbed 0.2 per cent against the US dollar to 1.53.

Only a handful of stocks were in negative territory, with the Footsie led higher by Primark owner Associated British Foods.

AB Foods cheered 561/2p to close at 1015p, or 6 per cent, as brokers hailed a 20 per cent rise in pre-tax profits for the first half. The group is confident of "very good progress" for the year.

Meanwhile, Peroni brewer SABMiller gained 86p to 1996p, or 4 per cent, after growing revenues in the three months to March 31 amid signs of recovering consumer demand in emerging markets.

Banks were also well represented on the risers' board following Goldman's results with Royal Bank of Scotland maintaining its recent run by adding 21/4p to 523/4p, and Lloyds Banking Group cheering 13/4p to 671/4p.

But supermarket giant Tesco led the fallers as investors failed to be inspired by annual profits of 3.4bn, at the top end of City hopes.

Shares eased 61/2p to 431p as the firm predicted a slow and steady pull out of recession for its main UK market, with stronger growth from its non-food and international businesses. Rival Morrisons was 11/4p lower at 2943/8p.

Luxury fashion label Burberry was another faller, down 6p to 6951/2p, despite forecasting profits "slightly ahead" of City hopes for the year to March.

TUI Travel, which owns Thomson Holidays, edged a penny up at 2891/4p after losing ground earlier.

Disruption from Iceland's volcanic ash cloud is currently costing the firm up to 6m a day.

Elsewhere, shares in chocolatier Thorntons slid 143/4p to 1101/4p after disappointing Easter sales at its high street stores and disruption from the winter weather.

The four biggest Footsie risers of the session were Associated British Foods, Royal Bank of Scotland, SABMiller, and Cairn Energy, which

closed the day 127/8p higher at 4191/2p.